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Abstract

In recent years, international
organizations like OECD and the World Bank have concluded
that standard principles of Public Finance Management (PFM)
are equally applicable to all areas of the national budget,
including the security sector. To date however, very few
reviews of PFM systems have included the security sector,
not least because many governments tend to be overly
protective about scrutiny of public finances in this sector,
and as a result most donors have been reluctant to engage.
As a result, the bulk of public expenditure reviews have
focused on non-security components of the national budget,
which represent an important but incomplete slice of
national spending. Despite growing awareness of the
importance of extending PFM reviews to the security sector,
so far the challenge of moving beyond basic principles
toward the adoption of a more comprehensive approach to
building an effective and fiscally sustainable post-conflict
security sector remains elusive. In countries such as
Afghanistan, Iraq and Sierra Leone, national authorities and
donors are struggling to regain control of unaffordable
levels of security sector spending, much of it financed
directly by donors. In many cases long-term external
assistance may be required for the security sector,
generating severe trade-offs with other priority sectors
which also require long-term external support. Overcoming
the legacy of a fiscally unsustainable and poorly managed
security sector calls for full application of PFM principles
to support the establishment of checks and balances required
to establish a wholly accountable security sector.